Captain Obvious says “Logistics is the Killer [e-Commerce] App”

If you throw a rock today, you’re going to hit someone or something that’s working on a “platform that will help small businesses sell their goods”.  Shoppi.ng, Shopistry, 500Shops, Traclist…

In the battle for Nigeria’s e-commerce, the latest weapon seems to be the eponymous packaged webshop.  Like I suggested a year ago, the real GNBO would be helping Nigeria’s small businesses sell their goods online.  The ecosystem seems to have risen to the challenge.

If you throw a rock today, you’re going to hit someone or something that’s working on a “platform that will help small businesses sell their goods”.  Shoppi.ng, Shopistry, 500Shops, Traclist and Konga Mall just to mention a few.  Even Mastercard wants in on the action.

Unfortunately, many of these are focusing on sorting out e-shops and payments but ignoring the biggest issue in e-commerce – logistics. The assumption seems to be that they’ll outsource logistics to some other player and charge customers for delivery to cover those costs.

I can’t even explain how wooly-headed this concept is.  Logistics is the heart and soul of e-commerce and Nigeria doesn’t have the requisite infrastructure to make outsourcing a sensible proposition.  I suspect that the costs associated with outsourcing logistics will eventually sink players facing vertically-integrated e-commerce players.

Furthermore, small businesses don’t avoid e-commerce simply because they can’t make websites or the costs of integrating payments.  Those problems have been solved some time ago.  They avoid e-commerce because delivering goods across Lagos (let’s not even talk of across the country) can be a pain in the bum (Ask anyone who’s ever tried to receive goods that they bought from a small online shop).  Furthermore, I’m not sure there’s any courier company who will handle cash on delivery on your behalf; and COD is a major driver of e-commerce in Nigeria.

In the end, if you’re going to help small businesses do e-commerce, you have to help them do ALL of e-commerce; not just the parts that are comfortable for you.

So allow me to make another prediction in the vein of our Lord’s at the last supper.

The e-commerce player that integrates logistics into their offering will win this battle.

And the people said “amen”.

This article was first published on Seyi’s blog.

Seyi Taylor has worked in medicine. Now he works in design, and technology (and sometimes medicine). Follow him on Twitter here.

21 Comments

  • You basically wrote the article I’ve been trying to write for weeks. But I don’t hate you 🙂

    But seriously, this webshop business has become a full-blown case of herd madness. For instance, which one is ZanyOx again? http://zanyox.com.ng/

    Of course, we always do things in herds. First it was deals. Then full e-commerce. Now its webshops.

  • Brilliant! and best of all succinct!

  • adeleke says:

    Nigerians have discovered open source eCommerce multi-shop software ! Get software, integrate payment module, keep no inventory, look for mugu, sorry, merchants to list products on your website, sell and collect COT like a bank.

    Solving the logistics problem should not be hard, I was expecting existing major courier companies to develop end to end support for local eCommerce. They already have the infrastructure, they only need to develop an affordable product with appropriate customization, for instance, to accept product returns.

    Unfortunately, for now, most courier companies are focused on the lucrative international shipments. And NIPOST is the gate keeper for new licenses.

    • Mlg says:

      And we all sing together: k-o-n-g-a.

    • Dikaoha says:

      Hey Adeleke.

      It has to be built from ground-up. Trust me I have been there.

      I spent the earlier part of this year doing trips to Abuja to meet with the top echelon of NiPost.

      In a nut-shell, its decayed. Even the private courier companies would never be able to re-invent themselves. i really thought one could re-use resources. But the infrastructure isn’t even there to begin with.

      Do you know that by the end of the yeah, Konga and Jumia would be the leading courier companies in Nigeria?

      It has to be built from ground up and purposefully.

  • femilonge says:

    Dika Oha , former VP Tech & Product Strategy at DealDey is working on something around this I think. Check out http://eos.com.ng and http://byeos.eos.com.ng/

    I’d expect him to bring lessons learnt at DealDey into this

    • Guest says:

      Check their chipping solution http://byeos.eos.com.ng/

    • Dikaoha says:

      Hey Femi thanks and how are you?

      ByEos is integrated into http://cart.com.ng today doing basic door-to-door delivery just to keep things going for our merchants but the big focus will be on disrupting this logistics space.

      Work is on-going still. But will make an announcement before the end of the year with something game-changing.

      Cheers Dika

  • Oluwayomi Ojo says:

    Nail on the head. Until we fix the logistics part, e-commerce will remain a big fail.

  • Dikaoha says:

    Actually the ecosystem is spread too thin.

    Truth is there must be over 10 million small businesses that may be able to sell online if enabled. And just like Seyi have pointed, enablement is much more than what is currently on the offer by my counterparts. But its a great start. If we were a thousand businesses offering real solutions to this sector, its still not enough but the question remains whether we are really offering solutions.

    If its true that there are 40 million Nigerians with access to the internet, then its worth pursuing but the ecosystem must try to solve real problems.

    Its true that I co-founded DealDey and had deep access into Konga essentially making me an ecommerce expert, but after launching http://cart.com.ng, I realise I’m on an entirely different turf that hasn’t been developed to say the least and need alot of quick learning which we are doing daily.

    From my vantage point thus far in the service of these small businesses, logistics is key, but not the only problem.

    From my days in DealDey, i learnt a valuable lesson. Do not over-think logistics, sometimes consumer behavior is like a stream of water – follows the path of least resistance.

  • Seun says:

    I just checked Zany OX Mall, I mean http://www.zanyox.com.ng … is like they offer logistics as well, can anyone confirm this? I want to list my small business online as well, I learn its FREE

  • DIGITRAK Technologies ltd says:

    I believed this will help solve the issue of delivery authentication, captures signatures and pictures of items receivers at the point of delivery.

  • Iyinoluwa Aboyeji says:

    Excited for the work Delivery Science is doing in this space – primarily because that’s where my bet is but I am hearing some interesting and simple solutions that amaze me in East Africa. For example (and this is my expo), imagine talking to the Keke Association and prebuying space on the Kekes and Danfos to deliver goods. They have to scan it in at every stage of the hand off and they get paid at the end of the month after all the deliveries for the month are confirmed by the customer. Lots of interesting ways east africa is doing logistics we could learn from

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